Pay-Per-Booking Advertising

All vacation rental owners have been spoiled by listing sites.

They’ve gotten accustomed to seeing several hundred (if not thousand) percent ROI on annual subscription fees…

They’ve become picky – even lazy – when a reservation inquiry doesn’t perfectly fit into their calendars…

And they’ve gotten a taste for champagne really quick, happily forecasting future earnings based on this one inexpensive (and probably unrealistic) listing fee.

But times are changing in the vacation rental industry…

And the most visible shift is in the direction of a pay-per-booking model, where, whether they like it or not, property owners and managers will begin to pay a percentage of every single booking generated through the major platforms (as opposed to the one-time phonebook-style listing fee):

What Does This Mean?

It means that the nature of vacation rental marketing budgets will suddenly switch, from a fixed yearly amount, to a scaled number based on performance.

And for most successful owners/managers who rely on listing sites, this new model means profits will drop.

Significantly.

So today – with the pay-per-booking implementation actually happening before our very eyes, and with the seismic roars in opposition heard from all corners of the globe to prove it – I am going to let you in on where I think things are going next…

The pay-per-booking model enlisted by HomeAway, FlipKey, and AirBnB is based on one primary power play: that property owners and managers do not have the time and/or ability to book nights on their own.

Leveraging this dependence on their control of the marketplace, big listing sites, it would seem, are smart to make this change. As profit-oriented corporations, it will make them more money in the short term.

But scratch below and you’ll find a much less obvious yet far more influential set of longer-term ramifications in a 4-Part …read more